The biopharmaceutical industry has improved its reputation in many dimensions, but improvements are still needed in reminding key stakeholders how its efforts contribute to overall public health, according to a new study from APCO Worldwide using the firm’s Return on Reputation Indicator model.
The study found that the industry continues to receive strong, positive ratings on innovation factors. But stakeholders now expect the industry to add context to their innovation story and assure its future commitment.
"After quantitatively analyzing the reputation for this industry, we've found a number of opportunities for the industry to further enhance its reputation with its key stakeholders," says Chrystine Zacherau, director of healthcare research at APCO. "Most notable among them is stakeholder's expanded definition of innovation, signaling a growing demand for the industry to address public health concerns and not only make products."
Using the ROR Indicator, companies can see quantitatively how a change in their reputation can ultimately influence a number of business outcomes such as consumer behavior, prescribing behavior, community activism, government policy, the litigation environment and financial return.
Among the report's other key findings is that a one point increase in its reputation index translates into:
• A 0.02 percent increase in market capitalization, or roughly more than a US$20 million increase for the average biopharmaceutical firm.
• A 0.2 percent increase in sales for the average biopharmaceutical company.
• An increase of more than 1.6 million people who are likely to support and defend the industry in the event of a crisis.
• A 1.2 percent increase in the number of Policy Leaders who support the most important policy issues facing the industry.
"Companies are increasingly aware that meeting stakeholder's expectations is a fundamental business principle," says Bryan Dumont, president of APCO Insight, which developed the ROR methodology. "With ROR, we can say with added statistical precision and confidence where biopharmaceutical firms should focus on improving reputation. With our proprietary, quantitative model, company executives can know exactly where to lead their company's external efforts."